STATE: Insurance Regulation Flashcards
What is the Armstrong investigation?
Public concern over abuse by insurers caused the New York state legislation to investigate the marketing practices of insurance companies operating in that state.
An The recommendations resulted from the investigation resulted in the New York insurance code, which set a precedent and pattern for insurance regulation by other state.
US vs Southeastern Underwriters Association 1944…
In the case the court ruled that the insurance industry was subject to a series of federal laws, many of which were in conflict with existing state laws.
This ruling held that insurance was a form of interstate commerce subject to regulation by the federal government. The results of this ruling was to shift the balance of regulatory Control from the states to the federal government
Mccarran – Ferguson Act 1945…also known as public act 15
Public Law 15: specified that continued state regulation of the insurance industry was in the public’s best interest.
The federal government had the right to regulate the business of insurance when the state did not. This act lead each state to revise its insurance laws to conform to the federal law and helped eliminate conflicts between state and federal law.
***Today, the insurance industry is considered to be state regulated because of this law.
The turmoil from the 1940 4SE you a ruling prompted Congress to enact public law 15.
What is Paul Vs Virginia?
This case involves one state Virginia attempt to regulate an insurance company in another state New York. The Supreme Court side against the company ruling that the regulation of the sale and issuance of insurance was the right of each state
The commissioner of banking and insurance has the power to..
- conduct investigations,
- administer oaths,
- Interrogate licensees and others,
- issue subpoenas to any licensees or other person with regard to any investigations, hearing, or other proceedings.
All of the above
The chief executive officer of the department of banking and insurance is the _____, and he is appointed by the governor.
Commissioner
The Commissioner may make and force alter modify amend repeal rules and regulations to effectuate the purpose of title 17
How Long before they take effect…
These rules can and will be effective not less than five days after they’ve been filed with the Secretary of State. The notice must be published at least 10 days prior to any hearing required by New Jersey law. This hearing may be enough conducted by the commissioner, his deputy, or by any employee authorized by the commissioner
Name additional powers and duties of the commissioner…
– Administrating The work of the department
-appointing and removing department personnel
-reporting illegalities by insurers, brokers, and other insurance personnel
-regulating insurers for insolvency
-Regulating insurance rates
-issuing insurance licenses and collecting the appropriate fees
– Suspending and revoking licenses for just cause
– Issuing cease and desist orders for just cause
– Making a yearly support concerning department operations and submitting it to the governor
– For me any function heating necessary in regard to insurance business in the state
– Administrating The work of the department
-appointing and removing department personnel
-reporting illegalities by insurers, brokers, and other insurance personnel
-regulating insurers for insolvency
-Regulating insurance rates
-issuing insurance licenses and collecting the appropriate fees
– Suspending and revoking licenses for just cause
– Issuing cease and desist orders for just cause
– Making a yearly support concerning department operations and submitting it to the governor
– For me any function heating necessary in regard to insurance business in the state
A domestic stock insurer is an insurer incorporated into Hortons with the laws of the state of New Jersey with its capital divided into shares and owned by stockholders. A stock ensure is primarily motivated by profits. Policyholders of the stock company are not entitled to dividends nor liable for any assessments.
17B: 18-2 – stock insurer
Mutual insurer: a domestic mutual insurance is an insurer Inc. in accordance with the laws of the state without permanent capital stock, the governing body of which is elected by its policyholders. Again, mutual insurance is owned by its policyholders.
The commissioner
An insurance agent is an insurance producer who is authorized, in writing, by any insurance company to act as its agents to solicit, negotiate, or sell insurance contracts on its behalf or to collect insurance premiums. He also may be authorized to countersign insurance policies on its behalf.
This is somewhat different than an insurance broker
An insurance broker is an insurance producer who, for commission, brokerages fee, or other consideration, ask for aids in any matter concerning negotiation, solicitation, or sale on insurance contracts as the representative of an insured or perspective insured. An insurance broker can also be a person who places insurance in and insurance company that he does not represent as an agent.
This is different than an insurance agent
An insurance consultant is a person who, for fee, commission, or other consideration, ask or holds himself out to the public or any licensee as offering any advice, counsel, opinion, or service with respect to the benefits, advantages, or disadvantages under any policy issued in this state. Consultant shall notinclude being trust officers, attorneys at law, and certified public accountant’s
This is different from an insurance agent and insurance broker…
Which of the following is not correct with regard to the New Jersey insurance underwriting Association – fair plan…
A) all insurers authorized to write property insurance in the state must participate in the New Jersey Insurance underwriting Association
B) member insurers will lose their authority to transact property insurance in this state if they refuse to participate in the fair plan
C) The fair plan may ensure property with an insurable value up to $5 million
D) if a person cannot obtain property insurance from an authorized in sure in the normal insurance market, she can apply to the association for coverage
C: the fair plan may ensure property with value up to 5 million.
The commissioner of banking and insurance has the power to reform which of the following duties…
A – prosecute agents who break the law
B - subpoena witnesses
C – withhold commissions of a broker in debt D – write insurance laws.
B: subpoena witnesses
And in sure whose principal office is sharded in Canada but is authorized to solicit insurance in the state of New Jersey best describes a…
Alien company
And application for property coverage submitted to the fair plan does not have to contain which of the following…
A – whether the property is insurable
B – whether an applicant those premiums for prior insurance coverage
C – evidence of past insurability
D – evidence of failure to obtain property insurance from and authorized insurer
C – evidence of past insurability
Property coverage may be secured under the fair plan if the applicant provides evidence that…
A – he has had no prior losses
B – he demonstrates his financial security
C – she has not previously applied for coverage under the fair plan
D – he has been unable to secure property insurance from it on from an authorized ensure in the normal market.
D – he has been unable to secure property insurance from an authorized you’re in the market
The commission of being insurance will assess which of the following penalties if an agent violates a cease and desist order…
Up to $5000
The coverage limit for property insured under the fair plan is…
$1.5 million
Which of the following types of exposure may be insured under the New Jersey Fair Plan?
A – tenet–occupied dwelling
be – a farm dwelling
C – physical damage coverage for an automobile
D – vacant property
A tenant occupied dwelling
In a reinsurance transaction, the originating insurer may also be referred to as the…
Ceding insurer
